Online Banking System

A Project Report
Submitted in fulfilment of the

Requirement for the award of the degree of

Master of Computer Applications (Batch 2022- 2025) To

By Ayush Mangal(52221206)

Crystal Tech Training

DEPARTMENT OF COMPUTER APPLICATIONS NATIONAL

INSTITUTE OF TECHNOLOGY, KURUKSHETRA
 DECLARATION

I hereby declare that the work which is being presented in this project report entitled
“Online Banking System”, in partial fulfilment of the requirement for the award of the degree
of MASTER OF COMPUTER APPLICATIONS submitted to the Department of Computer
Applications, National Institute of Technology, Kurukshetra is an authentic work done by me
since 1 March completing 4 weeks by Ayush Mangal under the Guidance of Gourav Mourya
in Crystal Tech Service Private Limited.

The work presented in this project report has not been submitted by me for the award of any
other degree of this or any other Institute/University.

Signature

Name of the Candidate: Ayush Mangal

Roll no. 52221206

This is to certify that the above statement made by the candidate is correct to the best
of my knowledge and belief. Further, during the above mentioned period he/she
worked regularly.

Date : 29/05/2025 Signature

Place : Indore
Name of the Company Supervisor(s)
/Mentor/Team Leader
 Abstract
The Online Banking System is a secure, modern, and user-centric digital platform
designed to streamline and automate core banking services using Java, Spring Boot, and
MySQL. The primary objective of this project is to provide users with real-time access
to banking functionalities such as account creation, fund transfer, transaction history,
and administrative operations, all while ensuring high standards of security and
performance.

Built with the Spring Boot framework, the application follows a layered architecture
separating concerns across controller, service, and repository components, ensuring
maintainability and scalability. The system integrates Spring Security and JWT (JSON
Web Token) for robust authentication and authorization, providing role-based access
control for administrators and customers. All sensitive user data, including login
credentials, is encrypted using BCrypt, enhancing protection against potential cyber
threats.

The backend is powered by MySQL, a relational database well-suited for maintaining

financial data integrity and enforcing structured data models for user accounts,
transactions, and audit logs. RESTful APIs are developed for seamless interaction
between client and server, enabling integration with frontend technologies or mobile
applications in the future.

This platform addresses the inefficiencies of traditional banking systems, which often
rely on manual processes and fragmented interfaces. By digitizing operations and
implementing real-time functionality, the system significantly improves the user
experience, reduces human error, and enhances operational transparency.

In addition to core features like fund transfers and account management, the system
provides an admin panel for overseeing user activity and maintaining system
configuration. The entire application is developed with a focus on responsiveness,
security, and extensibility—allowing easy integration of additional modules such as bill
payments, credit services, or AI-driven analytics in the future.

In conclusion, the Online Banking System redefines digital banking by integrating

essential banking services into a unified, secure, and accessible platform. It leverages the
power of modern backend frameworks and relational databases to deliver a robust
solution that meets the evolving demands of both users and financial institutions.
🔷 1. Introduction
1.1 Overview and Issues Involved

The rapid transformation of the financial industry has led to an increasing reliance on
technology to deliver banking services efficiently and securely. Traditional banking
systems, which are heavily dependent on manual processes and physical branch visits,
often result in inefficiencies such as long transaction times, limited service availability,
and heightened risk of human error. Additionally, maintaining physical records and
relying on outdated software systems contributes to data fragmentation and security
vulnerabilities.

With the advent of digital transformation, there is an urgent need to provide users with a
seamless and secure banking experience that is accessible anytime and from anywhere.
The Online Banking System presented in this project is designed to address these
challenges by creating a centralized, scalable, and secure digital banking solution. The
system integrates critical banking operations such as user registration, account
management, fund transfers, and transaction tracking within a responsive web
application powered by Java Spring Boot and MySQL.

Unlike many existing platforms that either lack real-time capabilities or fall short in
providing adequate security, this system emphasizes automation, responsiveness, and
data protection. It removes the dependency on physical infrastructure and significantly
reduces the workload on banking personnel, thereby enhancing efficiency and customer
satisfaction. Furthermore, the inclusion of an administrative dashboard enables oversight
and control over system-wide user activities and financial operations.

1.2 Problem Definition

Despite the availability of several digital banking solutions in the market, many suffer
from common limitations such as poor user interfaces, fragmented data management,
and weak authentication mechanisms. Some platforms lack modularity and are not
easily extensible, while others do not support real-time transactions or enforce sufficient
user authorization protocols.

This project addresses these issues by developing a secure, full-stack online banking
system that provides essential banking functionalities through RESTful APIs and a
structured relational database. The system is designed to ensure secure data handling,
accurate financial transactions, and comprehensive activity tracking, making it suitable
for deployment by modern financial institutions.

1.3 Team and Technologies

This project is developed by an individual full-stack developer as part of a software

training program, using industry-standard technologies. The backend is built using Java
17 and Spring Boot, which offer robust support for scalable application development.
Spring Security and JWT (JSON Web Tokens) are employed for authentication and
role-based access, while MySQL serves as the primary relational database for persistent
data storage. REST APIs are designed to allow future integration with mobile platforms
and third-party financial services.

By combining security, performance, and usability, the Online Banking System sets a
strong foundation for redefining the way users interact with digital financial services. It
offers a scalable framework that can evolve with the changing demands of users and
regulatory environments in the fintech domain.

🔷 2. Literature Survey
2.1 Existing Solutions

With the growing adoption of digital services, many financial institutions and third-party
developers have launched online banking platforms. These include full-scale services
from banks like HDFC NetBanking, SBI YONO, ICICI iMobile, and fintech
platforms such as Paytm Payments Bank and Google Pay. While these systems have
been instrumental in shifting customer preferences toward digital banking, they are often
proprietary, closed-source, and designed with a monolithic architecture that makes
customization and scalability difficult for new implementations or startups.

Many of these existing systems provide only partial functionalities or are limited by
platform constraints. For instance, third-party wallets may support peer-to-peer
transactions but lack features like savings account management, transaction statements,
and real-time balance checks. Some mobile banking applications are platform-specific
and not accessible via a web browser, which restricts accessibility across devices.
Furthermore, they may not offer transparent documentation for integration, role-based
control, or audit logs necessary for institutional oversight.

Security is another significant concern. Legacy systems often store passwords

insecurely, lack token-based authentication, or expose sensitive user data via poorly
designed APIs. As a result, the need for a customizable, open-architecture online
banking system that offers robust features, platform independence, and enhanced
security is more relevant than ever.

2.2 Methodology

To overcome the limitations of existing systems, this project adopts a modern Agile-
based software development approach. Agile enables iterative development through
short sprints, promoting regular feedback, continuous testing, and fast delivery of
incremental improvements. This methodology is well-suited for online banking systems,
where user needs and security requirements are dynamic and evolve frequently.

The project follows a microservices-inspired modular design, using Spring Boot to

handle the backend logic and REST APIs for communication between components. This
ensures flexibility in deployment and facilitates the separation of concerns across
different service modules such as authentication, account management, and transaction
processing.

The system employs Spring Security and JWT (JSON Web Token) for authentication
and access control. This choice ensures a secure and stateless session mechanism that
scales well in distributed systems. Role-based access ensures that users (e.g., customers
and admins) have access only to authorized resources, enhancing overall system
integrity.

For the database layer, MySQL is chosen for its ACID compliance, relational structure,
and wide adoption in the financial domain. The application uses JPA (Java Persistence
API) to interact with the database, ensuring clear abstraction of database logic and ease
of migration in the future.

By integrating proven open-source technologies with best practices in secure software

engineering, this project creates a feature-rich and extensible system that addresses both
functional and non-functional limitations of earlier platforms. The system also sets a
solid foundation for future enhancements such as mobile integration, AI-based fraud
detection, and support for real-time APIs like UPI.

🔷 3. Analysis & Design

3.1 Software Requirements

The Online Banking System is developed using modern enterprise-grade technologies

that support modular, secure, and scalable web applications. The backend is
implemented using Java 17 and Spring Boot, which together offer a robust, opinionated
framework for rapid application development. The system follows a layered architecture
separating controller, service, and repository components, enabling clean code
organization and easier maintenance.

The application uses Spring Security and JWT (JSON Web Token) for secure
authentication and role-based authorization. MySQL serves as the backend database due
to its relational structure, strong ACID compliance, and proven performance in financial
applications. Hibernate (JPA) is used as the Object Relational Mapping (ORM) tool,
enabling seamless database access and schema evolution.

For development and testing, the following environments and tools are used:

 IDE: IntelliJ IDEA

 Build Tool: Maven
 Postman: For REST API testing
 Git/GitHub: For version control
 JUnit and Mockito: For unit testing
3.2 Hardware Requirements

For development and deployment, the system requires minimal hardware specifications:

 Processor: Intel i3 or above / AMD Ryzen

 RAM: Minimum 4 GB
 Storage: 10 GB free disk space
 Operating System: Windows/Linux/macOS
 Server: Java-supported environment (e.g., Apache Tomcat or embedded server)

For deployment in a production environment, a cloud-based solution like AWS, Azure,

or DigitalOcean may be used to ensure scalability, backup, and high availability.

3.3 System Architecture

The system architecture is designed following a 3-layered MVC (Model-View-

Controller) pattern enhanced with RESTful APIs for communication. The layers
include:

 Controller Layer: Manages user input and API endpoints.

 Service Layer: Handles business logic such as validating funds, processing
transactions, or enforcing limits.
 DAO/Repository Layer: Communicates with the MySQL database via Spring
Data JPA.
 Security Layer: Ensures protected access using JWT, password encryption
(BCrypt), and role-based filters.

This architecture supports horizontal scalability and separates concerns, enabling

maintainability and extensibility.

3.4 Database Design

The application uses a relational database model to enforce structured and consistent
data storage. Key tables include:

 User: Stores login credentials and roles (id, name, email, password, role)
 Account: Maintains banking information (id, user_id, account_number,
balance)
 Transaction: Logs fund transfers (id, from_account, to_account, amount,
timestamp, status)

Relationships are managed using foreign keys, ensuring referential integrity. Unique
constraints are applied to account numbers and emails to prevent duplication. Cascading
operations are configured to handle dependent record updates/deletions appropriately.
3.5 Contribution by User Roles

 Customer:
o Register and log in
o View account details and balance
o Transfer funds to another account
o View transaction history
 Administrator:
o View all users and accounts
o Monitor transactions and manage suspicious activity
o Configure platform-level settings (e.g., transfer limits)

This modular role-based approach enhances the user experience and simplifies system
administration while maintaining secure access boundaries.

🔷 4. Implementation & Testing (Expanded)

4.1 Implementation

The implementation of the Online Banking System follows a modular, layered approach
to ensure separation of concerns and facilitate maintainability. The backend is built
using the Spring Boot framework, which simplifies dependency management and
application configuration through annotations and embedded server deployment.

The system defines RESTful API endpoints for all banking operations, including user
registration, login, fund transfer, and account or transaction management. These
endpoints are mapped to controller classes that forward requests to the service layer,
where business logic is executed. The repository layer, built using Spring Data JPA,
interfaces with the MySQL database to perform CRUD operations.

A secure authentication mechanism is enforced using Spring Security combined with

JWT (JSON Web Token). When a user logs in, a signed JWT token is generated and
sent back to the client. This token must be included in the header of subsequent API
requests to access protected resources. Tokens have defined expiration periods and are
verified on each request to ensure stateless, session-free authentication.

All passwords are encrypted using the BCrypt hashing algorithm, which adds a strong
layer of protection against brute force or dictionary attacks. Furthermore, role-based
access control (RBAC) is implemented to ensure that only authorized users can access
specific endpoints—customers access their own accounts and transactions, while
administrators have oversight over the full system.

Core modules implemented include:

 User Management Module: Handles registration, login, and profile updates.

  Account Module: Manages balance queries and account information.
 Transaction Module: Handles intra-bank fund transfers, maintains transaction
logs.
 Admin Module: Enables user oversight and data analytics.
 JWT Filter: Validates token on each API call.

4.2 Testing

To ensure the correctness, reliability, and security of the system, a comprehensive

testing strategy is employed that includes unit testing, integration testing, API testing,
and performance analysis.

 Unit Testing: Implemented using JUnit 5 and Mockito, covering service-level

logic such as balance checks, transaction validations, and exception handling.
Mock objects are used to isolate business logic from database operations.
 API Testing: Conducted using Postman, covering both successful and edge-
case scenarios. Endpoints are tested for expected responses, validation errors,
unauthorized access, and proper role restrictions.
 Security Testing:
o JWT Validation: Ensures that expired or tampered tokens are rejected.
o Endpoint Access Control: Verifies that users cannot access
unauthorized routes (e.g., customers attempting to access admin data).
o Input Sanitization: Protects against SQL injection, XSS, and other
input-based attacks using validation annotations.
 Performance Testing: Load testing with Apache JMeter simulates concurrent
user sessions. Results confirm that the system handles over 100 simultaneous
requests with consistent response times (<400 ms per request on average).
 Cross-Platform Testing: The application is tested across browsers (Chrome,
Firefox, Edge) and operating systems to ensure responsiveness and consistent
UI/UX.

The test-driven approach ensures that features are validated iteratively, bugs are detected
early, and the system remains stable under operational loads. Logging is integrated using
Spring’s logging framework (SLF4J with Logback), aiding in debugging and audit trails.

🔷 5. Conclusion & Future Scope

5.1 Conclusion

The Online Banking System developed using Java, Spring Boot, and MySQL serves
as a comprehensive, secure, and scalable solution for modern digital banking needs. The
system successfully replicates core banking functionalities—such as user registration,
account management, balance inquiry, transaction history, and fund transfers—within a
unified and centralized digital platform.
The platform addresses several limitations associated with traditional banking, including
inefficiencies due to manual processing, limited service accessibility, and the lack of
centralized user data management. By automating these processes and enabling real-
time service delivery, the system enhances both customer convenience and institutional
efficiency.

A major achievement of this system is its emphasis on security and data integrity. The
implementation of Spring Security and JWT-based authentication ensures that user
sessions are protected, and that access to critical resources is properly controlled.
Passwords are securely encrypted using BCrypt, and all sensitive operations—such as
fund transfers—are guarded by robust validation mechanisms to avoid errors or
fraudulent behavior.

The adoption of layered architecture, RESTful APIs, and role-based access control
(RBAC) contributes to code modularity, maintainability, and scalability. This makes the
system suitable not only for educational purposes but also as a prototype for real-world
banking applications. The inclusion of unit and integration testing, along with
performance benchmarking, validates the system’s stability and reliability under varying
loads and usage patterns.

Overall, this project successfully demonstrates how open-source technologies can be

leveraged to build enterprise-grade digital solutions that align with current industry
practices and user expectations in the financial domain.

5.2 Future Scope

While the current version of the Online Banking System delivers essential features for
secure banking, there remains significant scope for enhancement and innovation:

1. Mobile Application Integration: A dedicated Android/iOS app could be

developed to complement the web-based interface, ensuring greater accessibility
and convenience for users on the go.
2. UPI and QR Code Payments: Integration with government-backed real-time
payment platforms (e.g., UPI in India) and QR code-based transfers would
enable faster peer-to-peer and merchant transactions.
3. AI-Powered Fraud Detection: Machine learning models can be introduced to
analyze transaction patterns and detect suspicious behavior, enhancing financial
security through predictive analytics.
4. Multi-Factor Authentication (MFA): Incorporating OTP-based login and
biometric verification (e.g., fingerprint, facial recognition) would further
strengthen user authentication mechanisms.
5. Support for Loans and Investments: Modules for handling loan applications,
EMI tracking, and investment portfolios could transform the system into a full-
featured digital banking suite.
 6. Real-time Notification System: Integration of email/SMS alerts and push
notifications to keep users informed about successful logins, withdrawals,
deposits, and unusual activities.
7. Cloud Deployment and CI/CD Pipelines: Hosting the application on platforms
like AWS or Azure using Docker and Kubernetes would improve scalability,
fault tolerance, and ease of maintenance.

By incorporating these advanced features, the system can evolve into a competitive,
real-world product capable of supporting a wide range of financial services and adapting
to future technological shifts in the fintech landscape.